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Article
Publication date: 9 May 2016

Anders Pehrsson

A multinational firm’s expansion in a foreign market is a key issue of international business. The purpose of this study is to extend the understanding of essential…

Abstract

Purpose

A multinational firm’s expansion in a foreign market is a key issue of international business. The purpose of this study is to extend the understanding of essential drivers that will facilitate firm’s assessment of alternative modes of sequential expansion.

Design/methodology/approach

The study applies the knowledge-based view and explores a multinational firm’s sequential post-entry expansion in a foreign market. Event histories of Swedish industrial firms’ establishments of wholly owned subsidiaries in Germany, the UK and the USA were explored using Cox regression.

Findings

Broad market experiences stemming from corporate strategy and deep experiences from the preceding subsidiary increase the likelihood of a sequential investment. Effects of broad experiences are contingent on the context specified by the geographic scope of the firm and its general subsidiary experience.

Research limitations/implications

The study contributes to international expansion theory and integrates sources of knowledge originating from strategy theory and internationalization theory. The study shows that the dual approach is needed to understand international expansion.

Practical implications

In evaluating a further subsidiary investment in a foreign market, the multinational firm is advised to assess whether it possesses enough market experiences to justify the investment. The experiences should be associated with corporate strategy, the previous wholly owned subsidiary and the context specifications identified in the study.

Originality/value

The study is unique, as it addresses the simultaneous impact of broad and deep market experiences. Also, the inclusion of central context specifications makes the study novel.

Details

European Business Review, vol. 28 no. 3
Type: Research Article
ISSN: 0955-534X

Keywords

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Article
Publication date: 1 January 2012

Lisa Qixun Siebers

This paper aims to examine the important factors that influence foreign retailers' expansion in China. By doing so the paper proposes business strategies for foreign

Abstract

Purpose

This paper aims to examine the important factors that influence foreign retailers' expansion in China. By doing so the paper proposes business strategies for foreign retailers to be successful in China and other emerging economies.

Design/methodology/approach

A case study approach is employed to build theory. Five case studies were chosen, including the world's four largest retail firms: Wal‐Mart, Carrefour, Metro and Tesco, as well as the Japanese department store Heivado.

Findings

The paper identifies six important activities in successful retail expansion: adaptation to the external environment; responses to psychic distance; establishment of business networking; localization; entry strategies into new areas; and the role of local management team. A new framework articulates the interdependent relationships between various factors embedded in retail internationalization, including external environment, internal drivers, psychic distance, and expansion strategies.

Practical implications

The findings provide directions to managers of international retail firms on how to expand successfully in an emerging market.

Originality/value

This paper offers an exploratory framework on post‐entry expansion, which provides an indispensable link between previous research on pre‐entry and entry stages of retailer expansion and future research on foreign retailers' performance.

Details

Journal of Business Strategy, vol. 33 no. 1
Type: Research Article
ISSN: 0275-6668

Keywords

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Article
Publication date: 20 November 2020

Huifeng Bai, Julie McColl, Christopher Moore, Weijing He and Jin Shi

This empirical study, from the international retailing perspective, examines the direction of retailers' further expansion after initial entry into overseas host market in…

Abstract

Purpose

This empirical study, from the international retailing perspective, examines the direction of retailers' further expansion after initial entry into overseas host market in the context of the luxury fashion retail market in China.

Design/methodology/approach

The research adopts qualitative multiple case studies.

Findings

After initial entry into China, luxury fashion retailers further expand their retail operations through three directional patterns: cautious, regional and countrywide expansions. The stepwise expansion from tier-1 to tier-2 and tier-3 cities remains popular; however, the importance of the tier system of Chinese cities has been weakened because tier-3 cities in affluent regions are perceived to have more potential than some tier-2 cities in less developed regions. The retailers assess a potential local market through interrelated criteria, including location and strategic importance, economic development, available store locations and staff, a high degree of urbanisation and tourism, debatable favourable policies and offers, and popularity of e- and m-commerce. There is a positive relationship between popularity of e- and m-commerce in a city and the potential of that city to run brick-and-mortar stores.

Originality/value

The paper offers an insight into the current international retailing literature by examining the direction of luxury fashion retailers' further expansion after their initial market entry. Particularly, the research considers a set of criteria which can be used to assess a potential local market, and the impact of e- and m-commerce on local market choices for brick-and-mortar stores.

Details

International Journal of Retail & Distribution Management, vol. 49 no. 2
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 22 November 2017

Huifeng Bai, Julie McColl and Christopher Moore

The purpose of this paper is to examine internationalising luxury fashion retailers’ entry and post-entry expansion strategies in mainland China.

Abstract

Purpose

The purpose of this paper is to examine internationalising luxury fashion retailers’ entry and post-entry expansion strategies in mainland China.

Design/methodology/approach

The study adopts a pragmatic mixed-methods research approach, including a quantitative mail survey and qualitative face-to-face in-depth executive interviews.

Findings

Different from initial single entry methods, multiple methods are increasingly popular for luxury fashion retailers’ post-entry expansion in mainland China. Although directly controlled expansion strategies have become significant, local partnerships are still important and omnichannel distribution strategies are rapidly growing.

Research limitations/implications

The findings were generated in mainland China only.

Originality/value

This work provides an understanding of luxury fashion retailers’ activities in the Chinese market from both macro and micro perspectives. It examines luxury fashion retailers’ initial entry strategies, as well as their post-entry expansion strategies in mainland China. Few studies in the area of international luxury fashion retailing have employed a mixed-methods approach with this number of participants.

Details

International Journal of Retail & Distribution Management, vol. 45 no. 11
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 12 January 2015

Paresha Sinha, Mingyang (Ana) Wang, Joanna Scott-Kennel and Jenny Gibb

This paper aims to examine the role of psychic distance during the process of international market entry by software international new ventures (INVs) from small, open…

Abstract

Purpose

This paper aims to examine the role of psychic distance during the process of international market entry by software international new ventures (INVs) from small, open economies. Specifically, we investigate how home market and global industry contexts influence market-entry strategies, and how psychic distance influences initial then subsequent market-entry choice decisions.

Design/methodology/approach

Using Atlas.ti7 software, this paper adopts a qualitative, multi-case analysis of ten software INVs based in New Zealand. Thematic coding of interview and secondary data revealed three core processes: pre-entry considerations, market selection criteria and post-entry evaluation, across the stages of initial and subsequent market entry.

Findings

In the context of the global software industry, the key driver of proactive market entry by INVs from small, open economies is market size rather than psychic distance. During the process of market expansion, firms encounter the psychic distance paradox (PDP). A second paradox arises when, despite experiential learning, managerial perceptions of psychic distance increase, making entry into more distant markets less, rather than more, likely and reactive, rather than proactive.

Originality/value

This paper addresses contextual differences in software versus more traditional sectors, and the influence of psychic distance on market entry rather than outcomes. Specifically, extending our understanding of the PDP, we find perceptual psychic and cultural distance ignored as criteria for initial market-entry decisions, and initial positive attitudes toward risk-taking become less apparent during subsequent entries.

Details

European Business Review, vol. 27 no. 1
Type: Research Article
ISSN: 0955-534X

Keywords

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Article
Publication date: 23 October 2018

Huifeng Bai, Julie McColl and Christopher Moore

The purpose of this paper is to examine luxury fashion retailers’ ownership structures at their internationalisation strategies in Hong Kong and mainland China.

Abstract

Purpose

The purpose of this paper is to examine luxury fashion retailers’ ownership structures at their internationalisation strategies in Hong Kong and mainland China.

Design/methodology/approach

This study adopts a pragmatic mixed methods approach, comprising a quantitative mail survey and ten qualitative executive interviews.

Findings

This study found that group-owned luxury fashion retailers usually encounter fewer difficulties when internationalising into mainland China than their individually owned counterparts because of parenting advantage, particularly functional and service support. However, the success of some individually owned brands has demonstrated that branding strategies, management culture, international experience, financial power and local partners’ know-how are as important as parent company support and although the luxury market in mainland China has become developed, many foreign luxury fashion retailers still enter Hong Kong prior to mainland China. However, in relation to post-entry management and expansion strategies, the importance of Hong Kong has weakened because the emergence of capital cities, the growth of the middle class and fewer political restrictions.

Research limitations/implications

The research findings are generated in the context of Hong Kong and mainland China, they are therefore limited in explaining luxury fashion retailers’ internationalisation strategies in other markets. Despite the challenge of the sample size, 63 out of 130 survey respondents (48.5 per cent response rate) and ten interview participants are felt to be sufficient to represent the market.

Practical implications

This research can be used by practitioners when assessing appropriate entry strategies to the Chinese luxury fashion market.

Originality/value

This is a pioneering study of the Chinese luxury market from the perspective of international retail strategies. It differentiates between Greater China (including Hong Kong, Macau and Taiwan) and mainland China, and examines the impact of luxury fashion retailers’ ownership structures on their internationalisation strategies.

Details

International Journal of Retail & Distribution Management, vol. 46 no. 9
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 23 October 2018

Renata Maria Gomes, Jorge Carneiro and Luis Antonio Dib

The purpose of this paper is to identify patterns for the intra-market expansion of international branded retailers on a continent-sized emerging market using the network approach.

Abstract

Purpose

The purpose of this paper is to identify patterns for the intra-market expansion of international branded retailers on a continent-sized emerging market using the network approach.

Design/methodology/approach

A multiple-case study design of four foreign branded retailers that have expanded onto regional markets in Brazil is used.

Findings

The intra-market expansion process shares similarities with the cross-market expansion process; is influenced by the relationships of foreign branded retailers with local competitors and shopping mall firms; and market selection, mode of operation and store location decisions are interrelated and conjointly taken, instead of forming a three-stage process. Additionally, the importance of relationships with host market shopping malls firms is highlighted.

Research limitations/implications

This paper advances a conceptual model of the intra-market expansion process, which comprises a system of interrelated decisions – (regional) market selection, mode of operation and store location – influenced by several network effects.

Practical implications

Managers of foreign branded retail suffer from liability of foreignness when undertaking intra-market expansion. Although Brazil is a large market, the retail community is highly connected because of managers’ personal relationships. Brazilian shopping malls dominate suitable store locations, and represent a valuable source of knowledge and resources for the foreign branded retailer.

Originality/value

This paper addresses two under-researched aspects of international retail: branded retailers – manufacturers that develop brands and operate stores – and intra-market expansion (i.e. to geographic regions of a given foreign country). It also discusses the challenges of intra-market expansion in continent-sized emerging markets, with considerable regional diversity (culture, infrastructure and institutions).

Details

International Journal of Retail & Distribution Management, vol. 46 no. 9
Type: Research Article
ISSN: 0959-0552

Keywords

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Abstract

Purpose

This study aims to provide insights into the development of firm strategies of international expansion by examining the direct relationship between internationalization speed and firm performance and by exploring the interactive role played by networking capability.

Design/methodology/approach

This is an empirical study based on survey data collected from 343 small and medium-sized enterprises operating in Australia and New Zealand. Regression modelling analysis was performed.

Findings

This study found an inverted U-shape relationship between the speed at which a firm expands internationally and its performance. Expanding too fast or too slow leads to lower performance, and this performance implication is because of an interactive effect of the firm's networking capability.

Research limitations/implications

This study contributes to the literature by generating insights into how firm strategies of international expansion lead to improvement of firm performance, thereby giving guidance and providing suggestions to managers regarding how quickly to internationalize.

Practical implications

This study contributes to the literature by generating insights into how firm strategies of international expansion lead to improvement of firm performance and by providing suggestions to managers regarding decision-making in developing strategies for international expansion speed.

Originality/value

This is an original study based on empirical data collected from a management survey.

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Article
Publication date: 21 March 2016

Nattharika Rittippant and Abdul Rasheed

This paper aims to develop and test a real-options model investigating the antecedents predicting the types of options exercise (i.e. growth, delay and exit options) by…

Abstract

Purpose

This paper aims to develop and test a real-options model investigating the antecedents predicting the types of options exercise (i.e. growth, delay and exit options) by multinational enterprises (MNEs) after their initial foreign direct investment (FDI) announcements. Firm-, industry- and country-specific factors that influence the real options’ processes and different subsequent options to exercise were examined.

Design/methodology/approach

Binomial and multinomial logistic regressions were performed on the data collected from 281 pairs of initial FDI (mostly within Asia) announcements and subsequent announcements regarding further investment decisions by 41 Thai MNEs listed in the Securities Exchange of Thailand for 1995-2005.

Findings

The empirical evidence shows that host country factors (i.e. economic growth rate and economic freedom), industry competition and ownership concentration have significant effects on the MNEs’ further decisions on whether to grow, delay or exit out of their initial FDI.

Originality/value

The findings of this study suggest that the options’ lens is an appropriate approach to study managerial decisions and actions in the face of uncertainty. While the majority of prior empirical literature has dealt with situations that involve option creation, this study goes a step further by examining decisions subsequent to option creation. Option creation is not an end in itself, and only by studying subsequent exercise of options, one can fully appreciate the value of the real options’ approach. The empirical evidence from this study showed that the host country’s factors (i.e. economic growth rate and economic freedom), industry competition and ownership concentration have significant effects on the MNEs’ further decisions on whether to grow, delay or exit out of their initial FDI.

Details

Management Research Review, vol. 39 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

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Article
Publication date: 9 January 2017

Eldrede T. Kahiya

This study aims to use analogical reasoning to draw a conceptual link between liabilities in International Business (IB) and export barriers.

Abstract

Purpose

This study aims to use analogical reasoning to draw a conceptual link between liabilities in International Business (IB) and export barriers.

Design/methodology/approach

Following a review of 130 articles on export barriers, the study develops and applies a “liabilities” metonymy to connect the source construct (liabilities in the IB) and target subject (export barriers).

Findings

Liabilities in the IB map to export barriers, and the concepts of liability of foreignness, liability of outsidership, liability of newness and liability of smallness can substitute export barriers.

Practical implications

Adoption of metonymy creates new opportunities for enhancing theory development while offering alternative perspectives regarding coping mechanisms for overcoming export barriers.

Originality/value

This, to the author’s best knowledge, is the first study in the IB to theorize based on metonymy.

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